<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 12 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

   For quarter ended June 30, 2006           Commission File Number 333-19257

                                  KINETEK, INC.
               (Exact name of registrant as specified in charter)

                  Delaware                                  36-4109641
      (State or other jurisdiction of                    (I.R.S. Employer
       incorporation or organization)                   Identification No.)

        ArborLake Centre, Suite 550                            60015
            1751 Lake Cook Road                             (Zip Code)
            Deerfield, Illinois
  (Address of Principal Executive Offices)


               Registrant's telephone number, including area code:
                                 (847) 945-5591

           Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of Each Exchange
        Title of Each Class                        On Which Registered
        -------------------                        -------------------
               None                                        N/A

           Securities registered pursuant to Section 12(g) of the Act:

                                      None

      Indicate by checkmark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the Registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past ninety (90) days.

           Yes [X]  No [ ]


         Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check one):

   Large Accelerated Filer [ ] Accelerated Filer [ ] Non-Accelerated Filer [X]

      Indicate by checkmark whether the Registrant is a shell company (as
defined in Exchange Act Rule 12b-2).

           Yes [ ]  No [X]

      The number of shares outstanding of Registrant's Common Stock as of
August 14, 2006:  100.

<PAGE>
                                  KINETEK, INC.

                                      INDEX

 PART I     FINANCIAL INFORMATION                                PAGE NO.
 ------     ---------------------                                --------

 Item 1.    Financial Statements (Unaudited)                         3

 Item 2.    Management's Discussion and Analysis of Financial       11
            Condition and Results of Operations

 Item 3.    Quantitative and Qualitative Disclosures About          14
            Market Risk

 Item 4.    Controls and Procedures                                 14

 PART II    OTHER INFORMATION
 -------    -----------------

 Item 1.    Legal Proceedings                                       15

 Item 2.    Changes in Securities and Use of Proceeds               15

 Item 3.    Defaults Upon Senior Securities                         15

 Item 4.    Submission of Matters to a Vote of Security             15
            Holders

 Item 5.    Other Information                                       15

 Item 6.    Exhibits and Reports on Form 8-k                        15

            Signatures                                              16


                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                               PAGE NO.
         --------------------------------                               --------

Condensed Consolidated Balance Sheets at June 30, 2006                     4
and December 31, 2005

Condensed Consolidated Statements of Operations for the                    5
three and six months ended June 30, 2006 and 2005

Condensed Consolidated Statements of Cash Flows for the six months         6
ended June 30, 2006 and 2005

Notes to Condensed Consolidated Financial Statements                      7-10


                                       3
<PAGE>


                                  KINETEK, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        June 30,       December 31,
                                                          2006             2005
                                                       ----------       ----------
                                                       (Unaudited)
<S>                                                    <C>              <C>
ASSETS
Current Assets:
  Cash and cash equivalents                            $    9,315       $   11,676
  Accounts receivable, net                                 72,721           65,485
  Inventories                                              63,162           54,252
  Prepaid expenses and other current assets                 3,310            3,650
  Taxes receivable                                          1,101            1,926
  Assets from discontinued operation                          373              415
                                                       ----------       ----------
       Total Current Assets                               149,982          137,404

Property, plant, and equipment, net                        28,265           28,754
Goodwill, net                                             181,101          180,736
Deferred financing costs, net                                 676            1,999
Due from affiliated company                                 8,884            8,504
Investment in affiliate                                    12,344           12,344
Other non-current assets, net                               2,939            2,331
                                                       ----------       ----------
       Total Assets                                    $  384,191       $  372,072
                                                       ==========       ==========

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
  Accounts payable                                     $   43,690       $   33,715
  Accrued interest payable                                  4,187            4,337
  Accrued expenses and other current liabilities           12,638           12,282
  Current portion of long term debt                       315,415          293,354
                                                       ----------       ----------
       Total Current Liabilities                          375,930          343,688

Long-term debt                                                173           25,846
Deferred income taxes                                      31,769           29,529
Other non-current liabilities                               5,128            5,203

Shareholders' Deficit:
  Common Stock                                                 --               --
  Additional paid-in-capital                               50,006           50,006
  Accumulated deficit                                     (84,056)         (85,455)
  Accumulated other comprehensive income                    5,241            3,255
                                                       ----------       ----------
      Total Shareholders' Deficit                         (28,809)         (32,194)
                                                       ----------       ----------
      Total Liabilities and Shareholders' Deficit      $  384,191       $  372,072
                                                       ==========       ==========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>


                                  KINETEK, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                            Three Months Ended               Six Months Ended
                                                 June 30,                        June 30,
                                        -------------------------       -------------------------
                                           2006            2005            2006            2005
                                        ---------       ---------       ---------       ---------
<S>                                     <C>             <C>             <C>             <C>
Net Sales                               $  96,462       $  87,433       $ 183,349       $ 167,710
Cost of sales, excluding
   depreciation                            68,878          61,784         131,120         119,829
Selling, general and
   administrative expenses                 11,420          12,362          23,781          25,348
Depreciation and Amortization               1,336           1,368           2,665           2,744
Management fees and other                     963             874           1,853           1,667
                                        ---------       ---------       ---------       ---------

         Operating Income                  13,865          11,045          23,930          18,122

Other (income)/ expense:
   Interest expense                         9,028           8,986          17,985          17,817
   Interest income                            (16)            (16)            (50)            (65)
   Miscellaneous, net                         (60)            (40)            787             (29)
                                        ---------       ---------       ---------       ---------

Income from continuing operations
   before income taxes                      4,913           2,115           5,208             399

Income tax provision                        2,089           2,187           3,780           3,914
                                        ---------       ---------       ---------       ---------

Income/(loss) from continuing
   operations, net of taxes                 2,824             (72)          1,428          (3,515)

Loss from discontinued operations,
   net                                         --            (391)            (29)         (1,031)
                                        ---------       ---------       ---------       ---------

Net Income (Loss)                       $   2,824       $ (463)         $   1,399       $  (4,546)
                                        =========       =========       =========       =========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>
                                  KINETEK, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                                   June 30,
                                                           -----------------------
                                                             2006           2005
                                                           --------       --------
<S>                                                        <C>            <C>
Cash flows from operating activities:
  Net income (loss)                                        $  1,399       $ (4,546)
Adjustments to reconcile net income (loss) to net
  cash provided by operating activities:
   Depreciation and amortization                              2,665          2,744
   Amortization of deferred financing fees, bond
     premium and discount on senior secured notes             1,617          1,573
   Gain on sale of real property                               (307)            --
   Deferred income taxes                                      2,240          2,344

Changes in operating assets and liabilities:

   Current assets                                           (14,981)        (2,239)
   Current liabilities                                       10,181            966
   Net change in assets and liabilities from
     discontinued operation                                      42            437
   Non-current assets and liabilities                          (902)          (188)
   Due from affiliated company                                 (380)          (653)
                                                           --------       --------
   Net cash provided by operating activities                  1,574            438

Cash flows from investing activities:
   Acquisition of business                                       --           (481)
   Proceeds from sale of real property                          739             --
   Capital expenditures, net                                 (2,173)        (1,921)
                                                           --------       --------
   Net cash used in investing activities                     (1,434)        (2,402)

Cash flows from financing activities:
   Net (repayments)borrowings under revolving credit
     facility and other long-term debt                       (3,953)         2,090
                                                           --------       --------
   Net cash (used in)provided by financing activities        (3,953)         2,090

Effect of exchange rate changes on cash                       1,452             23
                                                           --------       --------

Net change in cash and cash equivalents                      (2,361)           149

Cash and cash equivalents at beginning of period             11,676         10,863
                                                           --------       --------
Cash and cash equivalents at end of period                 $  9,315       $ 11,012
                                                           ========       ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       6
<PAGE>
                                  KINETEK, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)

1.    ORGANIZATION

The unaudited condensed consolidated financial statements, which reflect all
adjustments that management believes necessary to present fairly the results of
interim operations and which are of a normal recurring nature, should be read in
conjunction with the Company's consolidated financial statements for the year
ended December 31, 2005, included in the Company's annual report on Form 10-K.
The Company conducts its operations exclusively through its subsidiaries.
Results of operations for the interim periods are not necessarily indicative of
annual results of operations.

Approximately 100% of the Company's long-term debt matures within the next 12
months. Currently, the Company is contemplating various avenues of refinancing
this debt, and Management is confident that it will do so prior to the maturity.
If the Company is unable to refinance or enter into a transaction that allows it
to pay off this debt, then there is substantial doubt about the Company's
ability to continue as a going concern.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements include the accounts of Kinetek,
Inc. and its subsidiaries. Material intercompany transactions and balances are
eliminated in consolidation. Operations of certain subsidiaries outside the
United States are included for periods ending two months prior to the Company's
year-end and interim periods to ensure timely preparation of the condensed
consolidated financial statements. Certain amounts in the prior year financial
statements have been reclassified to conform to the 2006 presentation.

The Company has recorded an income tax provision primarily attributable to
foreign taxes, state taxes and the change in the Company's deferred tax
liability. Due to the uncertainty of when the goodwill deferred tax liability
will reverse, the Company has not considered any future reversal of the deferred
tax liability related to goodwill to support the realization of deferred tax
assets. Additionally, the Company continues to maintain a full valuation
allowance against its deferred tax assets.

In February 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 155, "Accounting for Certain
Hybrid Instruments" ("SFAS No. 155").  SFAS No. 155 is an amendment of SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133") and SFAS No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" ("SFAS No. 140") and allows
financial instruments that have embedded derivatives to be accounted for as a
whole (eliminating the need to bifurcate the derivative from its host) if the
holder elects to account for the whole instrument on a fair value basis.  SFAS
No. 155 is effective for an entity's first fiscal year that begins after
September 15, 2006.  The Company does not expect the adoption to have a
material impact.

In June 2006, the Financial Accounting Standards Board, or the FASB, issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109, or FIN 48. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in a company's financial
statements and prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or


                                       7
<PAGE>

expected to be taken in a tax return. FIN 48 also provides guidance on
description, classification, interest and penalties, accounting in interim
periods, disclosure and transition. We are required to adopt FIN 48 effective at
the beginning of 2007. We are currently evaluating the impact of adopting FIN 48
on our future results of operations and financial condition.

3.    INVENTORIES

Inventories are summarized as follows:

<TABLE>
<CAPTION>
                                                    June 30,      December 31,
                                                      2006            2005
                                                    -------         -------
<S>                                                 <C>           <C>
  Raw materials                                     $36,801         $30,163
  Work in process                                    13,300          12,062
  Finished goods                                     13,061          12,027
                                                    -------         -------
                                                    $63,162         $54,252
                                                    =======         =======
</TABLE>

4.    COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) for the three and six months ended June 30,
2006 and 2005 are as follows:

<TABLE>
<CAPTION>
                                 Three Months Ended           Six Months Ended
                                      June 30,                   June 30,
                                --------------------       --------------------
                                   2006         2005          2006         2005
                                -------      -------       -------      -------
<S>                             <C>          <C>           <C>          <C>
Net income (loss)               $ 2,824      $  (463)      $ 1,399      $(4,546)
Foreign currency
 translation adjustments            907         (975)        1,986          279
                                -------      -------       -------      -------
Comprehensive income(loss)      $ 3,731      $(1,438)      $ 3,385      $(4,267)
                                =======      =======       =======      =======
</TABLE>

5.    ADDITIONAL PURCHASE PRICE AGREEMENT

Kinetek has a contingent purchase price agreement relating to its acquisition of
Motion Control Engineering on December 18, 1997. The terms of this agreement
provide for additional consideration to be paid to the sellers. The agreement is
exercisable at the sellers' option during a five year period that began in 2003.
When exercised, the additional consideration will be based on Motion Control
Engineering's operating results over the two preceding fiscal years. Payments,
if any, under the contingent agreement will be paid out in cash over a three or
four-year period, in annual installments according to a schedule, which is
included in the agreement. Additional consideration, if any, will be recorded as
an addition to goodwill.


                                       8
<PAGE>
6.    BUSINESS SEGMENT INFORMATION

Summary financial information included in the financial statements of the
Company is as follows:

<TABLE>
<CAPTION>
                                         Three Months Ended               Six Months Ended
                                              June 30,                        June 30,
                                     -------------------------       -------------------------
                                        2006            2005            2006            2005
                                     ---------       ---------       ---------       ---------
<S>                                  <C>             <C>             <C>             <C>
Net sales
  Motors                             $  74,112       $  66,098       $ 140,051       $ 126,305
  Controls                              22,350          21,335          43,298          41,405
                                     ---------       ---------       ---------       ---------
                                        96,462          87,433         183,349         167,710
Operating income
  Motors                                12,792          11,092          23,065          19,672
  Controls                               4,060           3,455           6,900           5,494
                                     ---------       ---------       ---------       ---------
                                        16,852          14,547          29,965          25,166

Management fees and unallocated
   corporate overhead                    2,987           3,502           6,035           7,044
                                     ---------       ---------       ---------       ---------
Total operating income                  13,865          11,045          23,930          18,122

Interest expense                         9,028           8,986          17,985          17,817
Interest income                            (16)            (16)            (50)            (65)
Miscellaneous, net                         (60)            (40)            787             (29)
                                     ---------       ---------       ---------       ---------

Income from continuing
operations before income taxes       $   4,913       $   2,115       $   5,208       $     399
                                     =========       =========       =========       =========
</TABLE>

7.    DISCONTINUED OPERATION

During 2004, the Company undertook a plan to sell Electrical Design and Control
("ED&C"), a wholly-owned subsidiary.

Summarized selected financial information for the discontinued operation is as
follows:

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED          SIX MONTHS ENDED
                                           JUNE 30,                    JUNE 30,
                                     --------------------       ---------------------
                                       2006         2005          2006          2005
                                     -------      -------       -------       -------
<S>                                  <C>          <C>           <C>           <C>
Revenues                             $    --      $   211       $    --       $ 1,079
Loss from discontinued
operations                                --         (391)          (29)       (1,031)
</TABLE>

The major classes of assets and liabilities of the discontinued operation is as
follows:

<TABLE>
<CAPTION>
                                JUNE 30,    DECEMBER 31,
                                  2006          2005
                                --------      --------
<S>                             <C>         <C>
Current assets, net of          $    373      $    415
   allowances
                                --------      --------
Total assets                         373           415
Current liabilities                   --            --
                                --------      --------
Net assets of discontinued
   operations                   $    373      $    415
                                ========      ========
</TABLE>

On May 2, 2005, the Company sold certain inventory, equipment, intellectual
property assets and contracts of ED&C. The Company no longer has any ownership
interest in ED&C, however it will continue to collect on the outstanding
receivables which were not sold.


                                       9
<PAGE>
8.     WARRANTIES

The Company provides warranties on certain products for varying lengths of time.
The Company estimates the costs at the time product revenue is recognized.
Changes to the Company's product warranty accrual during the six months ended
June 30, 2006 and 2005 are as follows:

<TABLE>
<CAPTION>
                                         2006          2005
                                       -------       -------
<S>                                    <C>           <C>
     Balance, beginning of period      $ 1,201       $ 1,934
     Warranties issued                     102           180
     Change in estimate                     --          (425)
     Settlements                           (81)         (335)
                                       -------       -------
     Balance, end of period            $ 1,222       $ 1,354
                                       =======       =======
</TABLE>


                                       10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

The following discussion and analysis of the Company's results of operations and
of its liquidity and capital resources should be read in conjunction with the
financial statements and the related notes thereto appearing elsewhere in this
Form 10-Q.

FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The statement regarding the Company in this document that
are not historical in nature, particularly those that utilize terminology such
as "may," "will," "should," "likely," expects," "anticipates," "estimates,"
"believes" or "plans," or comparable terminology, are forward-looking statements
based on current expectations about future events, which the Company has derived
from information currently available. These forward-looking statements involve
known and unknown risks and uncertainties that may cause the Company's results
to be materially different from results implied in such forward-looking
statements. Those risks include, among others, risks associated with the
industry in which the Company operates, the dependence on senior management,
maintaining sufficient working capital financing, competitive pressures, general
economic conditions and a softening of consumer acceptance of the Company's
products leading to a decrease in anticipated revenue and gross profit margins.
For additional information, see "Item 1A. Risk Factors" in the Company's Annual
Report on Form 10-K for the year ended December 31, 2005.

CONSOLIDATED RESULTS OF OPERATIONS

Consolidated net sales for the three months ended June 30, 2006 were $96.5
million, an increase of $9.0 million, or 10.3%, from the same period in 2005.
For the six month period June 30, 2006, consolidated net sales were $183.3
million, an increase of $15.6 million, or 9.3%, from the previous year.

Sales for the Company's Motors segment increased $8.0 million, or 12.1%, for the
quarter to $74.1 million; and increased $13.7 million, or 10.9% for the year to
date to $140.1 million. Sales of subfractional motor products increased by $2.9
million for the second quarter of 2006, and by $5.4 million for the year to
date. The subfractional sales increases for both periods were led by strong
demand for gearmotors sold to manufacturers of alternative fuel pellet stoves.
Rising global energy prices have stimulated significant growth of this product
for sale in North America and Europe. Sales of fractional and integral motor
products increased $5.1 million during the second quarter, and $8.3 million for
the year 2006 to date. The increases in both periods were due primarily to
favorable conditions in most of the Company's principal markets in North America
and Europe, plus net increases in market share. The Company has experienced
significant growth from sales of motors used in commercial floor care and golf
cars, as well as from the introduction of AC motors used in material handling
applications which have traditionally been served with DC motors. These
increases were partially offset by the unfavorable impact of the Euro on
European sales when translated into dollars. The stronger dollar caused
unfavorable translation impacts to consolidated net sales of $1.0 million for
the second quarter of 2006, and $2.0 million for the year to date. Sales for the
Company's Controls segment increased $1.0 million, or 4.8%, to $22.4 million for
the three months ended June 30, 2006. For the year to date period, Controls
sales increased $1.9 million, or 4.6%, to $43.3 million. The sales increases for
both periods were led by higher shipments of the Company's "I" family of
elevator control products, which are up over 100% from 2005. These increases are


                                       11
<PAGE>

partially offset by lower shipments of the Company's traditional control
products, which are being cannibalized by the "I" family of controllers.

Operating income increased $2.8 million, or 25.5%, for the second quarter of
2006, to $13.9 million, and increased $5.8 million, or 32.0%, to $23.9 million
for the year to date. Gross margin increased $1.9 million, to $27.6 million for
the quarter, an increase of 7.5%. For the year to date, gross margin increased
$4.3 million, or 9.1%, to $52.2 million. Gross margin declined slightly, from
29.3% of sales in the second quarter of 2005, to 28.6% of sales during the same
period in 2006. For the six-month periods ending on June 30, gross margin was
slightly lower at 28.5% of sales in 2006 compared with 28.6% in 2005. The
increased gross margins are primarily attributable to the sales increases
described above. In addition, several key factors affected the gross margin
amount and percentage of sales: 1) During the first half of 2005, the Company
incurred approximately $0.7 million in expenses and operating inefficiencies
associated with the integration of the O. Thompson, a New York-based elevator
control company, operations which were acquired in September, 2004, and other
facility rationalization actions. These expenses had a favorable impact on the
first six months of 2006 in comparison with the previous year. 2) Since 2003,
and continuing through the first half of 2006, the Company has experienced
severe increases in market prices paid for parts used in the assembly of motors,
especially copper, steel, and zinc, and increases in the prices of plastic
components and freight and transportation associated with rising global oil
prices. 3) The Company has increased revenue by raising prices to customers and
imposing surcharges linked to the cost of key commodities to partially offset
the aforementioned inflation. 4) The Company's ongoing productivity actions,
including rationalization of facilities and relocation of production to low-cost
locales, have a favorable impact on gross margin, providing further offset to
the aforementioned inflation. In total, the Company has been prevented by
competitive pressures from achieving complete recovery of the higher costs,
leading to the narrowing of gross margins as a percentage of sales.

Selling, general, and administrative expenses ("SG&A") were $11.4 million for
the quarter ended June 30, 2006, down $1.0 million from $12.4 million in the
same period of 2005. For the first half of 2006, SG&A expenses were $23.8
million, a reduction of $1.6 million compared with 2005. The reduction is
primarily driven by the timing of certain normal corporate overhead expenses
which are expected to be incurred later in 2006, and to the Company's ongoing
productivity actions. In addition, a $0.3 million gain from the sale of its land
and building, once associated with its Gear Research facility, was recorded as a
reduction of these expenses.

LIQUIDITY AND CAPITAL RESOURCES

In general, the Company requires liquidity for working capital, capital
expenditures, interest, taxes, debt repayment and its acquisition strategy. Of
primary importance are the Company's working capital requirements, which
increase whenever the Company experiences strong incremental demand or
geographical expansion. In the short term, the Company expects to satisfy its
liquidity requirements through a combination of funds generated from operating
activities and the funds available under its Credit Agreement. As the Company's
10 3/4% Senior Notes mature on November 15, 2006, and the Credit Agreement
expires on the earlier of December 18, 2006 or 30 days prior to the maturity of
the Company's Senior Notes, the Company is actively pursuing alternative
financing which would satisfy its existing creditors while providing working
capital necessary to support ongoing operations and the Company's acquisition
strategy. If the Company is unable to refinance or enter into a transaction that
allows it to pay off this debt, then there is substantial doubt about the
Company's ability to continue as a going concern.


                                       12
<PAGE>
Operating activities. Net cash provided by operating activities for the six
months ended June 30, 2006 was $1.6 million, compared to $0.4 million for the
six months ended June 30, 2005. The favorable performance year over year in cash
is attributable to the higher operating income discussed under "Consolidated
Results of Operations", which increased by $5.8 million. This was offset by net
increases in working capital consisting mainly of a $7.2 million increase in
accounts receivable and $8.9 million increase in inventory, offset by a
favorable change in the Company's current liabilities as accounts payable and
accrued expense and other current liabilities increased by $10.0 million and
$0.4 million, respectively.

Investing activities. In the six months ended June 30, 2006, net cash used in
investing activities was $1.4 million, compared to $2.4 million used in the same
period of 2005. The favorable change was primarily caused by acquisition costs
of $0.5 million for O. Thompson during the first quarter of 2005. No such
acquisition costs were incurred during the six months ended June 30, 2006.
Additionally, during the first quarter of 2006, the Company sold its land and
building related to its former Gear Research facility which was closed at the
end of 2004. Proceeds from the sale were $0.7 million, which generated a gain of
$0.3 million recorded as a reduction of selling, general, and administrative
expenses.

Financing activities. The Company is party to a Credit Agreement under which the
Company is able to borrow up to approximately $35.0 million to fund acquisitions
and provide working capital, and for other general corporate purposes.
Borrowings are secured by the stock and substantially all of the assets of the
Company. As of June 30, 2006, the Company had approximately $13.7 million of
available funds under this Credit Agreement. The Credit Agreement expires the
earlier of December 18, 2006, or 30 days prior to the maturity of the Company's
Senior Notes.

Approximately 100% of the Company's long-term debt matures within the next 12
months. Currently, the Company is contemplating various avenues of refinancing
this debt, and Management is confident that it will do so prior to the maturity.
If the Company is unable to refinance or enter into a transaction that allows it
to pay off this debt, then there is substantial doubt about the Company's
ability to continue as a going concern.

The Company is in compliance with the provisions of its Indentures.

In February 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 155, "Accounting for Certain
Hybrid Instruments" ("SFAS 155"). SFAS 155 is an amendment of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") and
SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 140") and allows financial instruments
that have embedded derivatives to be accounted for as a whole (eliminating the
need to bifurcate the derivative from its host) if the holder elects to account
for the whole instrument on a fair value basis. SFAS 155 is effective for an
entity's first fiscal year that begins after September 15, 2006. The Company
does not expect the adoption of SFAS 155 to have a material impact.

In June 2006, the Financial Accounting Standards Board, or the FASB, issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109, or FIN 48. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in a company's financial
statements and prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
description, classification, interest and penalties, accounting in interim
periods, disclosure and transition. We are required to adopt FIN 48 effective at

                                       13
<PAGE>

the beginning of 2007. We are currently evaluating the impact of adopting FIN 48
on our future results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's debt obligations are primarily fixed-rate in nature and, as such,
are not sensitive to changes in interest rates. At June 30, 2006 the Company had
variable rate debt outstanding of $12.9 million. A one-percentage point increase
in interest rates would not have a material effect on the amount of annual
interest paid. The Company does not believe that its market risk from financial
instruments on June 30, 2006 would have a material effect on future operations
or cash flow.

The Company is exposed to market risk from changes in foreign currency exchange
rates, including fluctuations in the functional currency of foreign operations.
The functional currency of operations outside the United States is the
respective local currency. Foreign currency translation effects are included in
accumulated other comprehensive income in shareholder's equity.

ITEM 4. CONTROLS AND PROCEDURES

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-15 of the
Securities Exchange Act of 1934 ("Exchange Act") promulgated thereunder, the
Company's chief executive officer and chief financial officer have evaluated the
effectiveness of the Company's disclosure controls and procedures as of the end
of the period covered by this report (the "Evaluation Date"). Based on such
evaluation, the Company's chief executive officer and chief financial officer
have concluded that the Company's disclosure controls and procedures were
effective as of the Evaluation Date to ensure that information required to be
disclosed in reports that the Company files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. There have been no changes in the Company's internal
controls over financial reporting during the period covered by this report that
were identified in connection with the evaluation referred to above that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

                                       14
<PAGE>

PART II. OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

            None

ITEM 1A.    RISK FACTORS

            No significant changes since December 31, 2005.

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS

            None

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

            None

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None

ITEM 5.     OTHER INFORMATION

            None

ITEM 6.     EXHIBITS

            A list of exhibits filed with this report is contained on the
            Exhibit Index immediately preceding such exhibits and is
            incorporated herein by reference.

                                       15
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                              KINETEK, INC.



                                        By: /s/ Daniel Drury
                                            -----------------
                                            Daniel Drury
                                            Chief Financial Officer

      August 14, 2006

                                       16
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
------                             -----------

<S>             <C>
31.1            Certification of Thomas H. Quinn

31.2            Certification of Daniel D. Drury

32.1            Certification of Thomas H. Quinn pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002

32.2            Certification of Daniel D. Drury pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002
</TABLE>

                                       17